The failure of lung cancer treatments has been attributed mostly to the development of drug resistance, however the underlying cellular and molecular mechanisms are poorly understood. Cancer initiating stem cells (CSCs), present in tumors in a small percentage, play critical roles in the development of drug resistance, metastasis, and cancer relapse. Hence, novel treatments targeting both bulk cancer cells and CSCs are under intense investigation. Herein, we report that lung cancer cells grown on a 3D fibrous scaffold form tumoroids that resemble in vivo tumors, expand CSCs, and provide a platform to identify anti-CSC drugs. The screening of an NCI library of FDA-approved drugs using tumoroid cultures led to identification of Actinomycin D (AD) as a top CSC inhibitor. Since CSCs are mostly resident in the tumor's inner core, AD was combined with an angiotensin receptor antagonist, Telmisartan (TS), which is known to increase drug permeability in tumors and was shown to have anti-CSC activity. Our results showed that AD + TS administered intra-tumorally was significantly more effective than either drug alone in both syngeneic and xenograft mouse models. The results of mechanistic studies revealed that CSC expansion in tumoroids was associated with activation of β catenin signaling and that AD + TS treatment reduced active β catenin levels in tumors. Together, these results establish the utility of the tumoroid culture system to expand CSCs ex vivo for targeted drug screening, to identify promising novel treatments with both anti-CSC and anti-cancer effects, and to individualize treatments for metastatic drug resistant lung cancer patients.